The latest figures from mortgage lender Halifax show that during the crucial spring sales period, UK house prices remained unchanged in May, supported by rising wages and a rise in economic confidence.
The average house price was little changed in May, falling by 0.1% compared with the previous month. The average price of a home in the UK is currently £288,688, down from £288,862 in April, according to the Halifax index. Prices rose by 1.5% year-on-year in May, following a 1.1% increase in April.
However, the North West of England was the best performing region in the UK, with average house prices reaching £232,258 and annual price growth of 3.8% in May. In Northern Ireland, the trend of robust growth continued, with an increase of 3.2% in May.
House Prices Boosted by Wages
The latest information helps to prove that the housing market remains solid despite the Bank of England's decision not to cut interest rates any further this month. The first region this month saw loan price growth, leading to a slowdown in the housing market.
"Strong nominal wage growth and signs of improving confidence in the economic outlook supported market activity throughout the spring months. The typical price of a property has not changed much over the past three months, reflecting a generally stable picture of house price trends," said Amanda Bryden, Halifax's head of mortgages.
"The market is not expected to see significant changes in the near future," she went on, pointing out the constrained availability of properties."
Meanwhile, housebuilder Bellway said in a handsome buy and sell statement that it was on track to deliver 7,500 homes to 31 July 2024, and that its overall performance at one point in the spring marketing campaign was still ‘robust’, with growth in personal bookings.
According to the housebuilder's buy and sell update, ‘a moderation in loan prices and interest rate inflation, in addition to wage growth, has benefited buyer demand’.
Furthermore, Bellway said that due to changes in its product range, it had accelerated its forecast for its usual promotional costs from £295,000 to £305,000.
Labour has said that if it wins the general election, it will fully implement a loan guarantee application to help first-time buyers get mortgages with low down payments.
Labour's "Freedom to Buy" Housing Initiative
The Conservatives added short-term software in 2021, and Chancellor Jeremy Hunt extended it until July the following year.
It provides for the authorities to guarantee part of a home loan. Its purpose is to encourage creditors to offer first-time buyers low-deposit deals.
Labour hopes that its Freedom to Buy scheme will enable 80,000 young people to buy their own home over the next five years.